Saving for Retirement? Don’t Foget to Budget for Health Care

AARP’s Research released a new report on saving for retirement: Planning for Health Care Costs in Retirement: A 2014 Survey of 50+ Workers. According to the introduction, the reason AARP did this research was to understand how health care costs factor into retirement planning. This is not only an interesting point, it’s an important one and worthy of research.

The key findings for this report show that as far as this issue, the news isn’t good. Almost 40% aren’t saving for health care costs and a bit over 40% relate they have no plans to do so.  Slightly over a quarter of respondents do plan to begin to save…within the next few years.

Why aren’t these folks saving? According to the findings, right now it’s unaffordable, either because they’re currently caring for another or they have other expenses. Although over 60% are saving for health care costs, almost half worried they won’t be able to afford health care. 

The study also shows a disconnect-between the belief of the need for saving and when the belief translates into action. I thought this finding quite interesting–this group plans to pay their own way when it comes to health care costs, with almost 90% replying that they will not rely on family for help with the costs of health care.

The survey also inquired into retirement readiness. The key findings show results that aren’t particularly surprising, with about 75%  respondents reporting they are “somewhat confident” while only slightly over 30% being “very confident”. Concomitantly, 75% have saved to some extent while 1/3 saved “to a large extent.” The full report is available here as a pdf.